During his Tuesday presentation, Steve Lutz, executive vice president of the Perishables Group, said that in 2005, organic fruits and vegetables had 2.6% dollar share of the entire produce category. In 2010, it had a 5.4% dollar share. Striking growth for a premium category during difficult economic times.
During yesterday's “Lessons from the Front Line — Retail Produce Manager Award Winners” panel, Lutz had the opportunity, as moderator, to ask a group of United Fresh 2011 Retail Produce Manager Award winners what they were seeing with the organic category at the store level.
Angels Camp, California was hit hard by the recession, and Michael Crutchfield said he has been slowly expanding the organic selection at his Save Mart produce department there. When he sees customers shopping the organic section, he makes a point to ask them what they are looking for and what they would like the store to carry.
Bob Merritt, manager at a Quality Food Center in Seattle, said his customers “want organics and they're more than willing to pay for it.” He said that the visual appeal of organic produce now tops conventional produce in his market as well. However, like others on the panel, he noted that while younger consumers seem willing to pay a premium for organics, older customers will shy away if the prices are much higher.
David Dozier, manager at a GFF Foods location in Moore, Okla., agreed, noting that his store has a lot of older clientele who are primarily focused on price, and they pass by organics as a result.
Younger families with small children are very concerned with bringing their kids up without pesticides, noted Dave Heetderks, Spartan Stores, Grand Rapids, Mich. To that demographic with those concerns, price point is not as much of a problem.
In Chicago, Jewel-Osco produce manager Paul Ferro said that there was a ceiling that tends to lead to diminishing returns for the category. A lot of shoppers are willing to look past a 30-cent or 40-cent difference in price for a similar conventional item, but “after that, it's an issue.”
However, as Craig Docherty, produce manager for a Las Vegas-based Vons location noted, the price point for organics has really come down in recent years as the category has grown.
Other produce managers on the panel included Donald Courtright, Beale AFB Commissary, Beale, Calif.; Ron Potter, Food City, Kingsport, Tenn.; Jo Poyzer, Woods Supermarkets, Nevada, Mich.; DJ Bertoldi, Big Y Foods, Wilbraham, Mass. SN will have an additional report on this panel, including comments on other topics, in an upcoming issue.